“It’s like we won the lottery,” said a Calgary resident who was on a house-hunting trip in Winnipeg last weekend.
After years of living in the Alberta city, he and his family were returning to Winnipeg. They quickly came to the realization that prospective home buyers receive significantly more bang for their buck in the local market than in major centres in Alberta or British Columbia.
They’ve already sold their home in Calgary for thousands of dollars more than what a similar home would cost in Winnipeg. With their “lottery” earnings, they managed to buy a home in Charleswood significantly lower in cost and significantly bigger in size than what they are leaving behind in Calgary.
The decision by the former St. James resident and his family to return to
Winnipeg is a trend extensively reported on in local newspapers. High-paying jobs in the past lured many Manitobans westward, but even with high wages, it’s difficult to afford to buy a home in
Alberta’s hyper-active housing markets.
Even in next door Saskatchewan, housing affordability eroded sharply in the first quarter of 2007, according to the report, as the province’s housing market jumped into a severe state of excess demand, resulting in soaring prices and a rapid decline in affordability.
In Calgary, the average MLS® sale price for a home in May was $487,523, compared to Winnipeg’s $194,590. In Saskatoon, the average MLS® sale price was $233,917.
WinnipegREALTORS® Association president Wes Schollenberg said the surge in home prices west of Manitoba makes the local market attractive to out-of-province buyers and has a positive impact on real estate investment in the province and Winnipeg.
While home prices have jumped in Manitoba over last year and affordability deteriorated across all housing classes in the first quarter of 2007, it remains the most affordable province in which to own a home, according to the latest Housing Affordability report released by RBC Economics.
“Housing conditions have been tight for the past four or five years (in Manitoba), creating fairly stable support for consistent house price gains,” said Derek Holt, assistant chief economist of RBC. “This recent deterioration in affordability was mainly driven by a jump in prices.
“However, the annual pace of price growth appears to be leveling off as income gains remain strong,” he added.
The RBC affordability index for Manitoba, which measures the proportion of pre-tax household income needed to service the costs of owning a home, deteriorated slightly for all housing types. A detached bungalow deteriorated slightly to 33 per cent, a standard two-storey home to 34 per cent, a standard townhouse to 20 per cent and a standard condo to 18 per cent.
According to the report, the risk of a market slowdown for Manitoba is much less pronounced compared to other western provinces where housing markets have experienced a more rapid increase in demand and thus greater downside potential in the future.